What does it mean to be entrepreneurial in a non-profit organization?
A recent article in the NonProfit Quarterly, Hooked on Grants: The Hidden Scourge offered some tips to nonprofit staff on the problem referenced as an “addiction” to grants. What I thought the author was going to offer the readers was alternatives to grants. Much has been written about using ‘entrepreneurial thinking’ in managing a nonprofit, including generating money.
For every nonprofit generating money through business endeavors, one can find thousands who believe their mission does not include anything business-like.
The Delancey Street Foundation
My favorite example of a business used to support a nonprofit or foundation is one I have used for years as a case study in my social entrepreneurship classroom, the Delancey Street Foundation, now located in San Francisco, Los Angeles, New Mexico, North and South Carolina and New York.
When I first started using them as an example of a nonprofit developing streams of revenue, they were generating at least 60% of their operating capital from business, and were located only in San Francisco. What is unique is that the people they are serving – ex-offenders, substance abusers, homeless and drop outs – run the foundation’s moving companies, restaurants, book stores, and furniture making.
They have over 40 years of success with this approach, even before the term “hybrid” was recognized as a potential business model.
Why don’t other organizations use their entrepreneurial model?
Many organizations have the same mission as Delancey Street Foundation, but only a few support themselves in the same way. If the organization does not understand there are other ways to generate revenue which could be used as capital for accelerating the nonprofit, then no creative entrepreneurial endeavor will work.
So why is it difficult for the nonprofit sector to look at programs and organizations entrepreneurially?
A couple reasons come to mind:
- Lack of business acumen
- Board vision (or lack of)
- Fear of failure
- Lack of time and no vision from the ED.
For those curious about what it means to be entrepreneurial in a non-profit, read more on the issues facing nonprofits moving into the entrepreneurial space. Most of all, learn about the ones who are developing for-profit strategies, like TOMS Shoes, Delancey Street Foundation, Caliber Collection (formerly Jewelry for a Cause), and the Global Good Fund.
Photo credit: © Macrovector | Dreamstime.com